Blog Post

Apple Says It Sold 5 Billion Songs; Could Movies Become A $100M Business?

Apple (NSDQ: AAPL) announced today that it has sold a total of about 5 billion songs, up from the 4 billion mark it announced in Jan this year. The more interesting bit is that it is now renting and purchasing over 50,000 movies every day, the company says. Apple has recently done deals with all of the major movie studios after a few years of trying to convince others besides Disney (NYSE: DIS) to come onto the service. At this rate, it will have sold or rented about 18.25 million movies on an annualized basis.

Cynthia Brumfield does some basic calculations on the possible annual revenues for Apple: “iTunes movie sales are priced at $9.99 (for library titles) and $14.99 (for new releases). Rentals are priced at $2.99 (library) to $3.99 (new releases), with Apple TV HD versions of film rentals priced at $1 above the standard rental prices. Assuming that the average price of a sale/rental combined is around $6, then Apple is raking in around $110 million in movie revenue alone on an annual basis.” While that isn’t necessarily a huge amount, that is the amount that didn’t exist before. It is also big in the online/digital video world.

This figure does not include TV shows, which is a much bigger business for Apple and could bring in as much as $200 million in revenues this year.

Fortune: On the music side, this represents a significant acceleration in music sales. It took Apple (AAPL) nearly three years to sell its first billion songs (Feb 23, 2006), ten months to sell its second billion (Jan. 6, 2007), seven months to sell its third (July 31, 2007) and fourth billion (Feb. 27, 2008), and only three and a half months to sell its fifth (June 19, 2008).